European markets saw gains, especially in Spain where the Ibex rose by 0.90%. Other indices included Germany’s DAX with a 0.33% increase, France’s CAC up by 0.18%, the UK’s FTSE 100 climbing 0.24%, and Italy’s FTSE MIB gaining 0.65%. In the U.S., markets also went up, boosted by Apple’s $100 million investment announcement and the news that products made in India will be exempt from tariffs. Apple’s shares jumped by $12.00, reaching $214.91. The Dow industrial average increased by 123.40 points (0.28%) to 44236.07, the S&P index rose by 45.50 points (0.72%) to 6344.40, and the NASDAQ climbed by 206 points (0.99%) to 21122.13.

US Bond Yields Rise

U.S. bond yields went up as a Treasury auction for 10-year notes approached, with longer-term yields rising the most. The 2-year yield hit 3.717%, the 5-year reached 3.784%, the 10-year climbed to 4.235%, and the 30-year yield rose to 4.820%. Crude oil prices were unstable, initially rising before falling below its 100-day moving average at $64.74. It neared the July 23 low of $64.71, possibly heading for $63.61. Gold prices dropped by $5.78, while Bitcoin bounced back by about $1,000, settling at $115,177. Today, Apple’s surge is leading the market higher, testing a crucial resistance level around $214. This stock is boosting the NASDAQ’s performance, and traders should keep an eye on this price point for a breakout or rejection. If it fails, the tech sector might face short-term challenges. Apple’s rise is backed by reports showing a 25% increase in its manufacturing output from India year-over-year, making the tariff news more significant. This growth, along with the recent Q2 2025 GDP revision to 2.2%, gives investors confidence. We view this as a reason to consider buying call options on tech stocks, but with caution.

Impact of Treasury Yields

However, we need to watch the rise in U.S. Treasury yields, now at 4.235%. This increase poses a challenge to the stock market rally, making borrowing costlier and bonds more appealing. With a 10-year note auction set for later today, it’s a crucial test for investor demand. The rise in yields is partly driven by the July 2025 CPI data at 3.5%, a reminder of the inflation issues in 2022-2023. We saw how rising rates hindered stock momentum back then, which is a trend to consider. Traders might look to buy puts on bond ETFs, betting that yields will keep climbing if the auction weakens demand. In commodities, crude oil is struggling, currently testing the $64.71 support level. The recent Energy Information Administration report showed an unexpected crude build of 2.1 million barrels, putting downward pressure on prices. A decisive break below this support could lead to further selling, making puts on oil ETFs a timely strategy. Meanwhile, gold is facing challenges as higher yields and a positive stock market mood lessen its appeal. In contrast, Bitcoin’s strong rebound indicates a continued speculative appetite, presenting opportunities for traders willing to embrace volatility. Spain’s Ibex outperforming Germany’s DAX suggests a potential pairs trade for those wanting to diversify away from U.S. tech-heavy investments. Create your live VT Markets account and start trading now.

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